FINDING OF NO SIGNIFICANT IMPACT

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2 FINDING OF NO SIGNIFICANT IMPACT The proposed action is Bureau of Land Management (BLM) and the Bureau of Indian Affairs (BIA) approval of 80-acre infill oil and gas development on the Southern Ute Indian Reservation (Reservation). A programmatic environmental assessment (PEA), tiered to the Final Environmental Impact Statement (FEIS) Oil and Gas Development on the Southern Ute Indian Reservation (CO-SJFO-O EIS), was prepared to analyze the impacts of the proposed action. The approximately 685,000 acres or 1,070 square miles of the Reservation is a patchwork of Indian and non-indian surface and mineral estates. The western and central portion of the Reservation is referred to as the study area and is the focus of the PEA. The study area consists of approximately 421,450 acres, of which approximately 316,000 acres is entirely held in trust for the SUIT or its individual members by the federal government. The PEA addresses 80-acre spacing for coal bed methane (CBM) wells proposed on lands within the study area, where the Southern Ute Indian Tribe (SUIT or Tribe) owns the oil and gas minerals, including lands where the surface is owned in fee and the oil and gas mineral rights are owned by the Tribe. The decision documented herein applies only to lands where the BLM and BIA have trust responsibilities. Alternative 2, the selected alternative, allows for 80-acre spacing of CBM wells on lands within the study area, where the Tribe owns the oil and gas minerals, including lands where the surface is owned in fee and the oil and gas mineral rights are owned by the Tribe contingent upon the imposition of terms and conditions required by the SUIT Tribal Council including: 1. Co-location of infill wells at existing drill pads to the maximum extent feasible. 2. Presumptive utilization of the best available air emissions control technology for new compressor installation and the presumptive upgrade of existing compressors to contemporary best available emissions control technology to the maximum extent feasible in a manner consistent with optimizing air quality on the Reservation. The total number of wells drilled will depend largely on environmental, geologic, and economic factors. However, the additional anticipated increment of development could total up to 770 CBM wells. Approximately 700, or 95%, of these wells would be directionally drilled from existing well pad locations. The total disturbance under the proposed action would be approximately 966 acres of short-term disturbance and an estimated 450 acres of long-term disturbance. The PEA analysis is programmatic. Programmatic environmental analyses are designed to predict impacts over a large scale before the exact location of specific development sites are known. As such, their focus is broader, they present a scale at which cumulative impacts are most apparent, and they provide the opportunity to establish an overarching management framework that guides future site-specific decisions. The PEA disclosed the environmental consequences of the proposed action (Alternative 2, selected) and the no action (Alternative 1) alternatives. Based on the PEA and the 80-Acre Infill Oil and Gas Development on the Southern Ute Indian Reservation FONSI, p. 1 August 2009

3 design criteria specified in the document, it is our determination that the proposed action will not have a significant impact on the natural and human environment beyond those analyzed in the 2002 FEIS to which the PEA analysis was tiered. The following is the rationale for reaching a finding of no significant impact (FONSI) determination considering the 10 factors required for significance determinations under 40 CFR : 1. Impacts that may be both beneficial and adverse. A significant effect may exist even if the Federal agency believes that on balance the effect will be beneficial. Effects on study area resources were considered and a summary of estimated impacts is provided in the Table Acre Infill Oil and Gas Development on the Southern Ute Indian Reservation FONSI, p. 2 August 2009

4 Table 1. Summary of affected resources, estimated impacts and the rational for significance. Resource Estimated Impacts Reason This Is Not Significant Air Quality Vegetation Wetlands Wildlife There would not be long-term significant impacts to air quality from carbon monoxide, ozone, nitrogen dioxide, particulate matter (PM), sulfur dioxide, visibility, and acid deposition in adjacent Class I Areas. There would be a short-term loss of 966 acres of vegetation and a long-term loss of 451 acres (following reclamation). Direct impacts to wetlands during construction could include filling, excavating, clearing, and grading existing wetlands. Indirect impacts could include potential alterations to wetland drainage systems. Indirect impacts to wetlands during production could include lowering of the water table, particularly near the Fruitland outcrop. Impacts to wildlife and sensitive species include habitat loss and fragmentation, human disturbance and noise, and injury and mortality including illegal harvest. Modifications to big game habitat types would Carbon monoxide, nitrogen oxide, PM, and sulfur dioxide increases would all be below National Ambient Air Quality Standards (NAAQS). Hazardous Air Pollutant (HAP) concentrations would be below risk criteria established by the US Environmental Protection Agency. It was concluded that the proposed action does not result in any new predicted exceedances of the ppm daily maximum 8 hour ozone standard and would not significantly contribute to any predicted concentrations above the standard. For Class I Area visibility, the proposed infill development would not result in predicted visibility impacts > 0.5 deciviews. Predicted changes in Class I Area deposition as a result of infill development would be less than Forest Service established thresholds. The percentage of long-term loss would be less than 1% for affected vegetation communities in the study area. Operators would comply with all conditions of the Clean Water Act. Operators would be required by the US Army Corps of Engineers to mitigate any long-term wetland loss by creating wetlands elsewhere. By co-locating the majority of wells, human related disturbances would be largely limited to existing well locations and access roads rather than previously undisturbed habitats. The percentage of long-term 80-Acre Infill Oil and Gas Development on the Southern Ute Indian Reservation FONSI, p. 3 August 2009

5 Resource Estimated Impacts Reason This Is Not Significant include long-term impacts to an estimated 209 acres of elk calving and deer fawning habitat, 579 acres of elk and deer winter habitat, 101 acres of big game migration habitat, and 562 acres of big game year round habitat habitat loss would be less than 1% for big game habitat types. Threatened and Endangered Species Soils Groundwater Water depletions as a result of CBM production will be incurred at a rate of approximately 18 acre-feet per year. These depletions from the San Juan River system may affect, and are likely to adversely affect, the Colorado pikeminnow and razorback sucker. With the implementation of design criteria, the proposed action may affect, but is not likely to adversely affect, southwestern willow flycatcher, Knowlton s cactus, Mancos milkvetch, and yellow-billed cuckoo. There would be no effect to black-footed ferret, Canada lynx, Mexican spotted owl, Mesa Verde cactus, and Pagosa skyrocket. Construction of well locations, pipelines, and roads would impact prime farmland and convert agricultural production areas to well pads, access roads, and pipeline ROWs resulting in a long-term and direct impact. An estimated 88 acres of prime farmland and 189 acres of highly erodible soils could be impacted. Potential impacts from groundwater contamination, shallow aquifer depletion, and methane contamination of shallow aquifers. The water use and associated depletions from the San Juan River system for this project were previously addressed by the Programmatic Biological Opinion (PBO) for Water Depletions Associated with BLM s Fluid Mineral Program and Other Actions Authorized by BLM on Public Lands within the San Juan River Basin in Colorado (ES/GJ-6-CO-08-F-002). The depletion may affect, and is likely to adversely affect, the Colorado River Fishes and is addressed in the PBO. The Dolores Public Lands Office will include the depletions associated with the subject project in their annual report to the BLM State Office. The US Fish and Wildlife Service concurred with the project Biological Assessment findings. The consultation was programmatic; therefore site specific consultation will be conducted at the project development phase for any actions that may affect listed species. The total long-term, direct disturbance of prime farmland and highly erodible soils is less 1% of the total acreage of these soil types in the study area. In addition, all disturbed areas would ultimately be reclaimed to the predisturbance land use once facilities are decommissioned and abandoned. Proper well construction and monitoring should prevent any impacts due to cross-flow between geologic formations. Dewatering from the Fruitland Formation would continue to occur but would not affect the 80-Acre Infill Oil and Gas Development on the Southern Ute Indian Reservation FONSI, p. 4 August 2009

6 Resource Estimated Impacts Reason This Is Not Significant availability or quality of water in overlying aquifers used for groundwater supply. Water levels could decrease in seeps or springs fed by the Fruitland Formation near the outcrop resulting in direct, but small to immeasurable, long-term impacts. Surface Water Depletions due to the proposed 80-acre infill development within the study area were estimated to peak in 2025 at 18 AF/y. Land Use There would be long-term impacts to an estimated 574 acres in seven SUIT grazing units located within the study area. An estimated 44 acres of long-term disturbance to agricultural lands could occur. Approximately 770 acres of long-term impacts would be realized to forest resources. The hydrologic modeling of stream depletions conducted for cumulative CBM development including the proposed action and reasonably foreseeable development estimate that maximum basin-wide depletions are less than 0.02% of the total streamflow of affected rivers in the study area. The magnitude of the surface water depletion associated with this alternative is small when compared to the average annual streamflow of the major rivers in the study area. The percentage of long-term loss would be less than 1% for affected grazing units, agricultural lands, and forest resources. Traffic and Transportation Cultural Resources There would be an estimated additional 92 daily vehicle trips for well drilling and long-term operations. The associated compressor station construction and operation activities would require an additional one daily vehicle trip for construction and operation, over the life of the project (20 years). Without having exact site locations or actual well location information, it is impossible to accurately predict the probability of encountering a site during the planning of any single well project, but it is anticipated This would not increase any of the average annual daily trips (AADT) for transportation routes by greater than 10%; therefore the impacts to traffic would be less than perceivable. Given the requirements for pre-construction surveys and SUIT and BIA review procedures, cultural sites that are encountered would be, in most cases, avoided. There also is the potential to recover and preserve scientific 80-Acre Infill Oil and Gas Development on the Southern Ute Indian Reservation FONSI, p. 5 August 2009

7 Resource Estimated Impacts Reason This Is Not Significant to be very low. information from the archaeological sites that might not be avoidable. If cultural resources cannot be avoided, specific design criteria would be implemented to mitigate impacts. Visual Resources Socioeconomics Noise Approximately 180 co-located wells and approximately 10 new well pads could be constructed in Level II and Level III visual resource value areas, where the level of change to visual characteristic should be low to moderate. The addition of co-located wells would result in incremental increases in impacts to visual resources while strong visual contrasts could occur at new well pads locations if they are constructed within foreground views of visually sensitive locations. The proposed action would have a beneficial impact to socioeconomics from SUIT revenues from royalties and severance tax revenues of $650 million. Additionally, the SUIT would realize a cumulative incremental benefit estimated at $195 million from net revenues from Tribal working interest, $350 million in direct spending that would enter the local economy, and add about 60 full-time jobs. Noise impacts to residents within the study area would be location-specific depending on the amount of oil and gas development activities and amount of background noise present in an area. For isolated rural locations, oil and gas construction and long-term pump jack and compressor operations could represent long-term nuisance impacts. Implementation of appropriate design criteria should reduce the level of contrast between project activities and existing conditions. Criteria would be developed on a case-by-case basis. Socioeconomic impacts to the SUIT and the local economy would be beneficial. Noise impacts would vary depending on the location of the wells and the existing infrastructure and activity levels at a given location. Design features would be developed to reduce noise impacts on a case-by-case basis. 80-Acre Infill Oil and Gas Development on the Southern Ute Indian Reservation FONSI, p. 6 August 2009

8 2. The degree to which the proposed action affects public health and safety. Construction activities and drilling associated with the proposed action would cause an increase in health and safety risks and potential impacts at levels that are proportionally greater than those of the existing condition. The proposed action does not represent any change in public health and safety risk, other than a potential for increase in worker or public health safety from accidents or fires. The additional construction, well drilling and long-term operation activities are not anticipated to create conditions such that a serious public health risk would occur. Construction and operation best management practices would continue to be utilized. These approaches have been shown to effectively protect public health and safey. 3. Unique characteristics of the geographic area such as proximity to historic or cultural resources, park lands, prime farmlands, wetlands, wild and scenic rivers, or ecologically critical areas. Although there are unique characteristics, such as cultural resources, wetlands and prime farmlands within the proposed action area, the proposed action would not cause a significant loss or destruction to these characteristics (Refer to Table 1). There would be no impacts to park lands, wild and scenic rivers, or ecologically critical areas. 4. The degree to which the effects on the quality of the human environment are likely to be highly controversial. The effects of implementing the proposed action on the quality of the human environment are not likely to be highly controversial. Extensive modeling and analysis was conducted to evaluate the effects from the proposed action. Effects from the proposed action are not considered highly controversial among the scientific community. The proposed action area has been subject to oil and gas extraction activities since the 1950s and therefore, the types of effects from resource extraction are well known. 5. The degree to which the effects on the human environment are highly uncertain or involve unique or unknown risks. The effects of the proposed action on the human environment are not highly uncertain, nor do they involve unique or unknown risks. Currently more than 30,000 natural gas and oil wells have been drilled within the SJB in New Mexico and Colorado. Oil and gas development has been occurring in the proposed action area since the 1950s and its effects on the human environment are well known. 6. The degree to which the action may establish a precedent for future actions with significant effects or represents a decision in principle about future consideration. The proposed action is not precedent setting. Oil and gas development has been occurring in the proposed action area since the 1950s and its effects are well understood. The proposed action is typical of past and reasonably foreseeable actions that are not known to have significant effects. This decision does not represent a decision in principle about a future consideration. 7. Whether the action is related to other actions with individually insignificant, but cumulatively significant impacts. Significance exists if it is reasonable to anticipate a cumulatively significant impact on the environment. Significance cannot be avoided by terming an action temporary or by breaking it down into small components. The PEA discusses cumulative effects in Chapter 4. No detrimental or significant cumulative effects were identified. The proposed action will not have significant effect 80-Acre Infill Oil and Gas Development on the Southern Ute Indian Reservation FONSI, p. 7 August 2009

9 on the quality of the human environment, either as an individual action or as part of the cumulative effects of other past, present, and planned actions with the study area. 8. The degree to which the action may adversely affect districts, sites, highways, structures, or objects listed in or eligible for listing in the National Register of Historic Places or may cause loss or destruction of significant scientific, cultural, or historical resources. Without having exact site locations or actual well location information, it is impossible to accurately predict the probability of encountering a cultural site during the planning of any single well project, but it is anticipated to be very low. Given the requirements for pre-construction surveys and SUIT and BIA review procedures, cultural sites that are encountered would be, in most cases, avoided. There also is the potential to recover and preserve scientific information from the archaeological sites that might not be avoidable. If cultural resources cannot be avoided, specific design criteria would be implemented to mitigate impacts. 9. The degree to which the action may adversely affect an endangered or threatened species or its habitat that has been determined to be critical under the Endangered Species Act of The Biological Assessment for the proposed action is provided as Appendix I of the PEA. The US Fish and Wildlife Service concurred with the project Biological Assessment findings. The consultation was programmatic; therefore site specific consultation will be conducted at the project development phase for any actions that may affect listed species. Water depletions as a result of CBM production will be incurred at a rate of approximately 18 acre-feet per year. These depletions from the San Juan River system may affect, and are likely to adversely affect, the Colorado pikeminnow and razorback sucker. The water use and associated depletions from the San Juan River system for this project were previously addressed by the Programmatic Biological Opinion (PBO) for Water Depletions Associated with BLM s Fluid Mineral Program and Other Actions Authorized by BLM on Public Lands within the San Juan River Basin in Colorado (ES/GJ-6-CO-08-F-002). The depletion may affect, and is likely to adversely affect, the Colorado River Fishes and is addressed in the PBO. The Dolores Public Lands Office will include the depletions associated with the subject project in their annual report to the BLM State Office. The US Fish and Wildlife Service concurred with the project Biological Assessment findings. The consultation was programmatic; therefore, site specific consultation will be conducted at the project development phase for any actions that may affect listed species. With the implementation of design criteria, the proposed action may affect, but is not likely to adversely affect, southwestern willow flycatcher, Knowlton s cactus, Mancos milkvetch, and yellow-billed cuckoo. There would be no effect to black-footed ferret, Canada lynx, Mexican spotted owl, Mesa Verde cactus, and Pagosa skyrocket. 10. Whether the action threatens a violation of Federal, State, or local law or requirements imposed for the protection of the environment. The proposal complies with all other relevant federal, state, and local laws and requirements imposed for the protection of the environment. Actions proposed in this project that could affect the environment are not unique or unusual. 80-Acre Infill Oil and Gas Development on the Southern Ute Indian Reservation FONSI, p. 8 August 2009

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11 DECISION RECORD This Decision Record presents the Bureau of Land Management (BLM) and the Bureau of Indian Affairs (BIA) decision to proceed with 80-acre infill oil and gas development of tribal minerals on the Southern Ute Indian Reservation (Reservation). The programmatic environmental assessment (PEA) of the proposed action is tiered to the Final Environmental Impact Statement (FEIS) Oil and Gas Development on the Southern Ute Indian Reservation (CO-SJFO-O EIS). Our decision, which responds to the BLM and BIA's fiduciary responsibility to the Southern Ute Indian Tribe (SUIT or Tribe) and its individual members, applies to management of Tribal mineral and surface estate within the defined exterior boundaries of the Reservation. The approximately 685,000 acres or 1,070 square miles of the Reservation is a patchwork of Indian and non-indian surface and mineral estates. The western and central portion of the Reservation is referred to as the study area (shown on Map 1-1; Attachment 1). It is our decision (the BLM San Juan Public Lands Center Manager and the BIA Southern Ute Agency Superintendent) to approve Alternative 2 (Proposed Action) 80- acre infill of coal bed methane (CBM) wells as described in the PEA. This alternative is the BLM, BIA, and SUIT s preferred alternative. Our decision: 1) establishes 80-acre spacing for CBM wells on the Reservation and, 2) establishes the environmental protection measures that are required of oil and gas management on the Reservation. Attachment 2 presents the environmental protection measures established for Alternative 2. Attachment 3 presents and reaffirms existing environmental protection measures applicable to oil and gas management on the Reservation. Alternative 2 specifically allows 80-acre spacing for CBM wells proposed on lands within the study area, where the Tribe owns the oil and gas minerals, including lands where the surface is owned in fee and the oil and gas mineral rights are owned by the Tribe. Our selection of Alternative 2 (Proposed Action) included the Continuation of Current Management, Alternative 1 (No Action). All requirements of law and regulation, standard conditions of approval and stipulations, mitigation and monitoring measures, as well as any mitigation developed at the project-specific stage, will be applied to all Alternative 2 s implementation. Our decision also takes into consideration that the Reservation has had natural oil and gas development since the early 1950s and that there are other important natural resources and values within the Reservation that require consideration and protection from unnecessary or undue degradation. Our decision balances the development of oil and gas resources to meet Tribal and public needs, with the irreversible or irretrievable commitment of Tribal natural resources and values, while providing for protection of the environment. Our decision does not authorize ground-disturbing activities. We (BLM San Juan Center Manager and the BIA Southern Ute Agency Superintendent) will conduct site-specific environmental analyses in accordance with NEPA, tiered to the PEA and in compliance with the requirements outlined in Attachments 2 and 3. Conditions of approval for Application for Permit to Drill (APD) permits and stipulations for right-of-way (ROW) grants will be developed and made a requirement of permits, in response to findings of site-specific environmental analysis. 80-Acre Infill Oil and Gas Development on the Southern Ute Indian Reservation Decision Record, p. 1 August 2009

12 Our decision is consistent with all applicable federal, state, Tribal and county laws, regulations and stipulations (see Appendix B of the PEA). All pertinent and applicable statutory requirements were considered in our decision. Our decision applies only to Southern Ute Indian Tribal and allotted surface and/or mineral estate oil and gas development under BLM's and BIA's fiduciary responsibility to the Tribe and its individual members. SUMMARY OF ALTERNATIVES The PEA analyzed two alternatives in detail: Alternative 1 No Action (Continuation of Present Management) and Alternative 2 (Proposed Action) 80-Acre Spacing of CBM Wells. Alternative 1 No Action (Continuation of Present Management) Alternative 1 represents the continuation of current management consistent with the 2002 FEIS and ROD. APDs would continue to be authorized within the scope of the 2002 FEIS. This no action alternative would potentially entail drilling 269 conventional wells and 367 CBM wells under the 160-acre spacing unit on Tribal mineral estate. Alternative 1 provides a baseline for comparison of the incremental impacts of Alternative 2, the proposed action. Alternative 2 Proposed Action (80-Acre Spacing of CBM Wells) Alternative 2 is the preferred alternative. This alternative analyzes the impacts of 80- acre spacing for CBM wells within the study area, where the Tribe owns the oil and gas minerals, including lands where the surface is owned in fee and the oil and gas mineral rights are owned by the Tribe contingent upon the imposition of terms and conditions required by the SUIT Tribal Council including: 1. Co-location of infill wells at existing drill pads to the maximum extent feasible. 2. Presumptive utilization of the best available air emissions control technology for new compressor installation and the presumptive upgrade of existing compressors to contemporary best available emissions control technology to the maximum extent feasible in a manner consistent with optimizing air quality on the Reservation. Alternatives Considered But Not Analyzed in Detail No other alternatives were considered. ENVIRONMENTALLY PREFERRED ALTERNATIVE Identification of the environmentally preferred alternative involves difficult judgments from widely differing perspectives. Environmental effects must be considered along with the social, economic requirements of present and future generations. Strictly based on biological and physical effects, Alternative 1 - No Action (Continuation of Present Management) is the environmentally preferred alternative. In comparison to Alternative 2, Alternative 1 would result in the least impact to biological and physical resources. However, based on consideration of the biological, physical, and human environment, including social and economic factors, Alternative 2 Proposed Action is also 80-Acre Infill Oil and Gas Development on the Southern Ute Indian Reservation Decision Record, p. 2 August 2009

13 considered an environmentally preferred alternative. Alternative 2 allows for gas development while mitigating environmental resource impacts to an acceptable level. This Alternative would result in more revenue to the Tribe, thus providing the Tribe with improved social and economic benefits. Additionally, Alternative 2 would enhance the local and regional economy through continued employment opportunities and revenues from rents and royalties. MANAGEMENT CONSIDERATIONS We selected Alternative 2 80-acre infill of CBM wells because it provides for development of Tribal leases within the study area to meet oil and gas production objectives of the SUIT, while protecting the environment. Our decision recognizes that: 1) the area has undeveloped oil and gas resources to meet public needs, 2) the companies hold valid existing leases, 3) the SUIT intend to develop their mineral resources, and 4) there are other natural resources within the area which require consideration and protection from environmental degradation. In addition to the standard environmental protection measures of Alternative 2, we have adopted new environmental protection and monitoring measures to ensure that all practicable means to avoid or reduce environmental harm have been incorporated. Based on review of all components and impacts associated with Alternative 2, combined with adherence to regulations, stipulations, environmental protection measures and monitoring, Alternative 2 will not cause unnecessary or undue degradation of the environment. Our decision to approve Alternative 2 is also based on careful consideration of a number of factors including the following: 1) SUIT self-determination, 2) agency statutory requirements, and 3) national policy. Southern Ute Indian Tribe Self Determination Delegated by Congress to the Secretary of the Interior, the trust responsibility for Indian mineral management and development requires the federal government to take such action as serves the best interests of the Indian people. The SUIT mineral estate is very important to the Southern Ute Indian people. Historically, mineral development has been and still is a major source of income for the SUIT. Through the provisions of the Indian Self Determination Act of 1968 and the Indian Mineral Development Act (IMDA) of 1982, the SUIT has taken an active role in the management and development of their mineral resources. Tribes are viewed under federal law as quasi-sovereign nations, and federal agencies coordinate with the Tribes on a government to government basis. Given the SUIT's quasi-sovereign status, state and local jurisdiction over the SUIT and its lands is limited. However, federal agencies have a trust responsibility to Tribes, which must be considered when federal actions potentially affect Tribal resources. As a result of the trust responsibility, the BLM's decision-making process is significantly different on Indian land from its process on public land. On Indian land, the BLM has the added responsibility of assigning considerable weight to Indian goals and interests, whereas on public land, the BLM s actions are guided by the Federal Land Policy and Management Act (FLPMA) and the public s best interest. Additionally, with regard to Indian lands, land use conflicts and ambiguities in federal regulations and policies are generally resolved in favor of the Indian Tribe's best interests. This is consistent with the federal government s responsibility to protect Indian land and take such action as best serves the interests of Indian Tribes and Tribal members. 80-Acre Infill Oil and Gas Development on the Southern Ute Indian Reservation Decision Record, p. 3 August 2009

14 Agencies Statutory Requirements Our decision is consistent with all federal, state, Tribal and local authorizing actions required to implement Alternative 2. All pertinent statutory requirements applicable to this Alternative were considered. These include BLM oil and gas regulations under the Mineral Leasing Act of 1920, the Federal Oil and Gas Royalty Management Act (FOGRMA) of 1982, and the IMDA of Encompassing BIA regulations are the Indian Minerals Leasing Act of 1920 and the IMDA of In applying NEPA to Indian issues, federal agencies must conduct thorough analyses of the proposed action and alternatives. The decisions made based on the analyses must also take into consideration that federal agencies are required to reasonably and prudently further the best interests of tribes and to consult with tribes in ascertaining tribal interests. Regulations applicable to SUIT oil and gas activities and enforced by other federal agencies, either directly or through delegation to the states, include: consultation with US Fish and Wildlife Service under the Endangered Species Act regarding threatened, endangered and candidate species; coordination with the US Environmental Protection Agency regarding air and water quality under the Clean Air Act, the Clean Water Act, and the Safe Drinking Water Act; consultation with the Army Corps of Engineers regarding waters of the U.S.; and consultation with the State of Colorado Historic Preservation Office regarding cultural resources (see Appendix B of the PEA). National Policy Exploration, development and operation of the Tribal oil and gas mineral estate are an integral part of the BLM and BIA trust responsibility. Four principal pieces of legislation give primary direction to the agencies for Indian mineral operations: the Allotted Lands Leasing Act of 1909, the Indian Minerals Leasing Act of 1938, the Mineral Leasing Act of 1920, and the IMDA of Furthermore, the United States continues to rely heavily on foreign energy sources. Development of Tribal energy sources assists with reducing U.S. dependence on foreign energy supplies. Production of Tribal natural gas resources is consistent with the National Energy Policy position that natural gas is the energy of choice" because of its clean burning qualities. MITIGATION and MONITORING Our decision incorporates: 1) all terms, conditions and stipulations of Tribal oil and gas leases under applicable BLM and BIA regulations for oil and gas leasing, development and operations (43 CFR 3100 and 3160, and 25 CFR part 211,212 and 225). These include all Federal Onshore Oil and Gas Orders and Notices to Lessees, all development procedures, all standard on-lease conditions of approval and off-lease ROW stipulations (Attachment 3); and 2) all new environmental protection and monitoring measures contained in Attachment 2. Operators, lessees, and ROW grant holders on tribal lands are required to obtain all applicable federal, state, Tribal and local permits and to comply with applicable federal, state, Tribal and local laws. PUBLIC INVOLVEMENT The Draft PEA was posted for BLM and BIA on the following website: Additionally, print copies of the Draft PEA, as well as the 2002 FEIS, were made available for viewing during the comment period at the San Juan Public Lands Office, the Durango Public Library and the Ignacio Community Library. The pre-decisional PEA was released on April 22, 2009, with a 30-day public 80-Acre Infill Oil and Gas Development on the Southern Ute Indian Reservation Decision Record, p. 4 August 2009

15 comment period. The availability of the Draft PEA was announced in the Durango Herald on April 19 and 22, 2009, and a news release was provided to approximately 140 contacts, including newspapers, radio and television stations; environmental groups; elected officials and aids; and individual interested parties. The comment period was subsequently extended an additional two weeks with a comment receipt deadline of June 5, The comment deadline extension was announced in the Durango Herald on May 21, A news release was also distributed to the list of contacts noted previously. A total of six comments were received: five hard copy letters and one via the BLM/BIA website. The electronic message was printed and is included with the hard copy letters in the administrative record for this project. Appendix J of the PEA provides all comments received, as well as how they were addressed. DECISIONS It is the responsibility of the federal government to protect Indian lands and to take actions in the best interest of Indian tribes. The BLM and the BIA, as agents of the Secretary of the Interior, are responsible for administering Indian surface and mineral estates for leasing, development and operations, where the mineral estate and/or the surface estate is held in trust for Indian people. These roles and responsibilities are summarized below: Lease issuance and administration of surface development are the responsibility of the BIA, which acts as the surface-management agency. The BLM is responsible for permitting and administering operations. This includes approval of well density, underground activities, well operations, production verification, and compliance. The SUIT is integrally involved in the decision-making processes about leases and permits involving Tribal lands, which may be issued only with SUIT consent in compliance with the Indian Reorganization Act of Additionally, other federal, state and local governmental entities have roles in Tribal mineral development and operations (detailed in Appendix B of the PEA). As with the 2002 FEIS, the PEA is not the final review upon which approval of all actions in the study area will be based. Site-specific environmental analyses and additional NEPA compliance (i.e., Determination of NEPA Adequacy [DNA], Environmental Assessment [EA] or EIS) will be required for all site-specific actions. The scope of this additional approval process will be streamlined and facilitated by the programmatic evaluation of impacts contained in the 2002 FEIS and the PEA. These actions begin when a lessee or operator submits an APD to the BLM. The APD and ROW application processes described in Appendix B of the PEA are unchanged from that described in the 2002 FEIS. When applications are received, an on-site inspection is scheduled for agency and Tribal representatives. The private surface owner, if applicable, also would be notified. The lessee/operator would show the group where each facility would be constructed. Appropriate changes or modifications of the application are made as needed during the on-site inspection. Information would be gathered by the BLM and BIA to analyze the 80-Acre Infill Oil and Gas Development on the Southern Ute Indian Reservation Decision Record, p. 5 August 2009

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18 ATTACHMENT 1 MAP OF STUDY AREA Decision Record and FONSI Attachment 1

19 ATTACHMENT 2 ENVIRONMENTAL PROTECTION MEASURES The SUIT has developed management requirements for the implementation of Alternative 2 (Proposed Action). These requirements would include: Co-location of infill wells at existing drill pads to the maximum extent feasible. Presumptive utilization of the best available air emissions control technology for new compressor installation and the presumptive upgrade of existing compressors to contemporary best available emissions control technology to the maximum extent feasible in a manner consistent with optimizing air quality on the Reservation. Design features which would be implemented under the proposed action would include the specific measures that are outlined below and in Chapter 4 of the 2002 FEIS, which were referred to as mitigation measures. Additionally, the SUIT, BIA and BLM have collaborated to develop new or to modify existing measures to minimize the impacts of the proposed action. The following section provides design features which were developed for the 2002 FEIS, as well as new or modified features developed for the proposed action evaluated in this document. Each of the features is identified with the following bullet demarcation: AIR QUALITY 2002 FEIS design features New or modified design features Roads would be surfaced or dust inhibitors would be used (e.g., surfacing materials, non-saline dust suppressants, water, etc.) as appropriate, on roads and well locations constructed on soils susceptible to wind erosion, to reduce the amount of fugitive dust generated by traffic or other activities. Speed limits would be enforced to the extent practicable on roads in and adjacent to the project area, to further reduce fugitive dust. Reduce Compression Requirements: Reducing the need for life of project (LOP) compression by limiting the need for injection compressors. Non-selective Catalytic Reduction: This control technology is applicable to relatively new engines and requires the installation of catalysts in the engine exhaust. The catalyst removes between 80% and 90% of the uncontrolled nitrogen oxide (NOx) emissions, for an operating emission rate of 1.0 to 5.0 grams per horsepower hour (g/hp-hr). The cost effectiveness of this control technology applied to a 2,500 to 4,000 horsepower (hp) rich-burn engine ranges from $315 to $395 per ton of NOx removed. Decision Record and FONSI Attachment 2, p. 1

20 Lean Combustion: This technology involves the increase of the air-to-fuel ratio to lower the peak combustion temperature, thus reducing the formation of NOx (new engines and retrofit applications). The controls are between 80% and 90% efficient, for an operating emission rate of 1.5 to 4.0 g/hp-hr. The cost effectiveness of this control technology applied to a 2,500 to 4,000 hp rich-burn engine ranges from $480 to $500 per ton of NOx removed. Selective Catalytic Reduction: This is a post-combustion control technology that is applicable only to exhaust streams with significant oxygen content (a lean burn engine). The controls are between 80% and 90% efficient, for an operating emission rate of 1.0 to 2.5 g/hp-hr. The cost effectiveness of this control technology applied to a 2,500 to 4,000 hp rich-burn engine ranges from $700 to $890 per ton of NOx removed. Fuel Cell Technology: It is not feasible to connect enough fuel cells together to generate the necessary compression horsepower. About 75 fuel cells (at a capital cost of nearly $30 million) would be required to provide 20,000 hp of compression. In addition, current technology allows only two fuel cells to be connected in a series, and, as of January 1998, there were only 160 of these units operating worldwide. The cost effectiveness of this control technology ranges from $20,000 to $40,000 per ton of NOx removed. Natural Gas-Powered Drilling Rigs: The theoretical use of natural gas-fired engines to power drilling rigs, mud pumps, and associated equipment, rather than dieselpowered equipment, is technically feasible to reduce PM10 (particulate matter 10 microns in size) and sulfur dioxide (SO2) emissions. However, such equipment is not commercially available. The following design features are outside the jurisdiction of the BIA s management authority: Withdraw or Prohibit Future Leasing: Previous NEPA document comments have suggested the BIA withdraw or don t offer leases, apparently to eliminate natural gas development and the related air pollutant emissions. However, once the Department of the Interior Secretary has approved a valid mineral lease granted by a Tribe, the Department may impose operational condition, but may not unilaterally rescind such a lease. Similarly, under current federal mineral law, future leasing can be prohibited only in specific legal circumstances and would generally require the formal concurrence of the SUIT. The U.S. Congress could revise these laws, but the prospect of securing passage of such legislation and appropriation of funds for that specific purpose is extremely remote. In addition, elimination of natural gas leasing is inconsistent with Congressional direction [through the Clean Air Act (CAA)] for development and promotion of alternative clean fuels needed to improve air quality nationally. NO x Emissions Cap and Trade : Previous NEPA document comments have suggested the BIA consider NO x emissions trading, therefore limiting NO x emissions at current levels. Existing NO x emission facilities could then either keep, trade or sell their emission allocations (essentially a property right to pollute) to other groups seeking to increase their NO x emissions. When coupled with banking (holding, but not using credits) and discounting (reduced emission credit values with each Decision Record and FONSI Attachment 2, p. 2

21 trade ), overall NO x emissions would decrease. Under the CAA, the U.S. Congress has already established an allowance program for certain SO 2 -emitting facilities, and Congress could establish a similar NO x trading program to be implemented by the applicable air quality regulatory agencies. o Phased (Staged) Development: Previous NEPA document comments have suggested the BIA reduce the intensity of natural gas development, such as limiting the...number of wells or...amount of emissions until reach[ing] 0.5 deciview... The BIA does not have the authority to require that development of existing leases be limited when specified emissions levels are reached. However, an overall air pollutant emissions level of concern could be established at a point where reevaluation would occur, providing timely management review and ensuring compliance with the Federal land managers mandate to protect Air Quality Related Values (AQRVs) through participation in the applicable air quality regulatory agencies pre-construction permitting. However, this action might also require the consent of the SUIT. NEW OR MODIFIED DESIGN FEATURES Electric Compression (including solar power): Using electric-powered compressor motors in place of the typical natural gas-fired compressor engines could eliminate direct NO x emissions from compressor station locations. Increased NO x emissions are likely to occur at the point of electrical generation, as they often burn dirtier fuels and emit more air pollutants (such as from coal-fired power plants). Using current industrial electrical rates and assuming 100% control due to elimination of 2.0 g/hphr NO x emissions at the compressor site, the cost effectiveness of electric compression is roughly $26,000 per ton of NO x removed. Photovoltaic (solar) electrical systems cannot provide the needed power requirements for proposed injector well and pipeline compression engines (nearly 118,000 hp). All new and replacement internal combustion gas field engines must meet, at minimum, recently promulgated (January 18, 2008, 73FR3568) New Source Performance Standards (NSPS) (40 CFR 60, Subpart JJJJ). Additionally, all new and replacement internal combustion gas field engines greater than or equal to 500 design-rate horsepower (or site de-rated horsepower values, as long as manufacturer de-ration values and emission factors are supplied and current demonstration compliant with appropriate emission rate requirement) must not emit more than 1 gram of NO x per horsepower-hour upon issuance of the Decision document, as opposed to being delayed under the NSPS. All older compression installations within the Ignacio Blanco field will be upgraded to contemporary best available emissions control technology within five years (2012). All new and replacement internal combustion gas field engines must meet, at minimum, recently promulgated (January 18, 2008, 73FR3568) NSPS (40 CFR 60, Subpart JJJJ). Additionally, all new and replacement internal combustion gas field engines greater than or equal to 500 design-rate horsepower must not emit more than 1 gram of NO x per horsepower-hour upon issuance of the Decision document, as opposed to being delayed under the NSPS. Decision Record and FONSI Attachment 2, p. 3

22 All prime mover diesel drilling rig engines will meet Tier 2 (or better) emission standards. 1 Refer to Appendix G the Air Quality Technical Document for more clarification on meeting air quality mitigation measures. Air Quality Monitoring SUIT EPD, BLM, and BIA may perform inspections of facilities within the exterior SUIT boundary to assess compliance with air quality mitigation. Based on the results of the annual report, SUIT EPD may require additional control measures for operators with facilities within the SUIT boundary to minimize impacts to air quality. VEGETATION Avoid areas containing sensitive vegetation types, such as wooded riparian vegetation or known sites with culturally important plants, to the fullest extent possible. Reclaim and revegetate all disturbed areas of soil with approved, certified weed free seed mixes, fertilizer, and/or mulch. Separate topsoil and set aside for reclamation purposes. Limit construction activities to dry conditions to reduce soil compaction and rutting, as appropriate. Use spark arresters on chainsaws and mufflers on vehicles to prevent wildland fires. Burning brush, trash, scrap materials, etc. is restricted by state agency or Reservation rules. Apply herbicide only under the supervision of a licensed pesticide applicator, and ensure that application, storage, and disposal procedures meet state and federal requirements. Clean up spills of petroleum products or produced water in an appropriate manner as soon as possible to minimize damage to plant materials. Control erosion and sedimentation with Best Management Practices (BMPs). 1 Drilling rig engines for new wells, not work overs or recompletion rigs. Decision Record and FONSI Attachment 2, p. 4

23 NEW OR MODIFIED DESIGN FEATURES All oil and gas operators will obtain a permit from the SUIT Forestry Division prior to the removal of wood materials greater than 4 inches in diameter from well pads or pipelines. An annual report detailing reclamation of facilities must be submitted by all oil and gas operators with facilities on Tribal lands within the SUIT boundary no later than March 1 of each year to the SUIT DOE and the BLM. The report format is outlined in Appendix E. WETLANDS 2002 FEIS Design Features Avoid construction in wetlands to the fullest extent possible. Identify unavoidable direct and indirect impacts on wetland areas during individual project planning. Develop a wetland mitigation/monitoring plan and obtain necessary permits, prior to initiation of construction activities. When it is necessary to cross streams and riparian areas, design facilities to cross at right angles, rather than parallel, in order to minimize the area of impact on these resources. Use BMPs at any temporary stream crossings, and rehabilitate wetlands as soon as possible. Protect water quality within, and downstream of, the study area from soil erosion and sedimentation by BMPs that include erosion control devices and management procedures, retention of a vegetation buffer strip (minimum of 100 feet) between water bodies and disturbed areas, and spill prevention procedures. Conduct equipment fueling, maintenance, and storage operations at least 100 yards from any wetland or stream system. NEW OR MODIFIED DESIGN FEATURES Whenever reasonably possible, bore under jurisdictional waters of the U.S., including drainages and wetlands to avoid and/or minimize surface impacts. CULTURAL SPECIES Avoid disturbing areas containing culturally significant plant species (e.g., cottonwood trees along the Los Piños River). NEW OR MODIFIED DESIGN FEATURES No new or modified design features have been identified for cultural species. Decision Record and FONSI Attachment 2, p. 5